The China Banking Regulatory Commission and other four departments have released a notice on doing a good job in supporting small loans.

On February 28, the China Banking and Insurance Regulatory Commission, the Ministry of Finance, the Ministry of Agriculture and Rural Affairs, and the People's Bank of China issued a notice on the assistance of small loans. Improvements to credit management processes are being made. Banks should conduct credit rating and lending in compliance with laws and regulations based on the production and operation characteristics, repayment ability, and other factors of the assisted population, to reasonably determine loan amounts and terms. Encouragement is given for banks to develop credit models using financial technology based on the production and operation data of the assisted population, while ensuring the privacy and security of user data, to improve approval efficiency. The full text of the notice is as follows: Notice from the China Banking and Insurance Regulatory Commission, the Ministry of Finance, the Ministry of Agriculture and Rural Affairs, and the People's Bank of China on the Assistance of Small Loans To all banking regulatory agencies, provincial, autonomous region, direct-controlled municipality, planned single-city, and Xinjiang Production and Construction Corps finance departments, agricultural and rural (agricultural and animal husbandry) departments (bureaus, committees), the People's Bank of China Shanghai headquarters, provincial, autonomous region, direct-controlled city and planned single-city branches, policy banks, large commercial banks, and joint-stock banks: Small loans for poverty-stricken populations are an important means to support the consolidation and expansion of the achievements of poverty alleviation. They have played a positive role in meeting the financing needs of the poverty-stricken population listed in the archives and helping to develop industries in previously impoverished areas. In accordance with the decisions and arrangements of the Party Central Committee and the State Council on coordinating the establishment of a normalized mechanism to prevent a return to poverty and promote the comprehensive revitalization of rural areas, after the transition period, small loans for poverty-stricken populations have been adjusted and optimized to become assistance for small loans, further supporting the precise development of production and income increase for rural populations in need of assistance. The notice on the assistance of small loans is as follows: I. Key Points of the Assistance Policy for Small Loans (1) Beneficiaries: Preventing a return to poverty and the poverty-stricken population listed in the archives in need of continued assistance (hereinafter referred to as the assisted population). Loans are granted on a household basis. (2) Loan amount: Up to 100,000 RMB. (3) Loan term: Within 3 years. (4) Loan interest rate: Banks are encouraged to comprehensively consider factors such as their own capital and management costs, credit ratings and repayment abilities of loan applicants, as well as financial subsidies, to determine loan interest rates reasonably. The loan interest rate remains unchanged during the contract period. (5) Collateral: No collateral required. (6) Subsidy method: Through regular assistance funds, 70% of the loan interest rate is subsidized by the central finance (with a subsidy cap of not more than 2.5 percentage points), and on this basis, local finance departments can arrange subsidies by a certain proportion according to their financial resources and actual situations, actively guiding borrowers to bear part of the interest. The maximum subsidized loan amount should generally be capped at 50,000 RMB. For borrowers with significant production and operation expenditures that require an increase in production scale, the purchase of agricultural facilities and equipment, and the operation of facility agriculture, the maximum subsidized loan amount can be appropriately increased from 50,000 RMB to 100,000 RMB. At the same time, coordination with other financial subsidy policies should be done well. (7) Risk compensation mechanism: Counties (districts) that have set up risk compensation funds for small loans to poverty-stricken populations should maintain the basic stability of the current mechanism, and other regions are encouraged to share loan risks in an appropriate manner based on market-oriented and legal principles. (8) Loan purpose: Loans should be used precisely for the development of production and operation by the assisted population and cannot be used for non-production expenditures such as marriage, home construction, financial management, or the purchase of household goods; nor can they be used for investments in enterprises or other organizations through means such as dividend sharing, debt transfer, or quota exchange. (9) Loan conditions: Applicants should abide by laws and regulations, be honest and trustworthy, have no significant adverse credit records, and have full legal capacity to act; they should have a genuine need for production and operation financing, possess labor production skills and repayment abilities; loan funds should be used for industrial projects that comply with legal regulations and national policy requirements; applicants should ideally be between 18 years (inclusive) and 65 years (inclusive). II. Improving the Professional Operation Mechanism (1) Increase internal resource allocation within banks. Encourage banks to provide appropriate internal fund transfers and pricing discounts for assistance in small loans, increase support for assistance in small loans in terms of staffing, cost arrangements, performance evaluations, and resource clearance, to effectively meet the loan needs of the assisted population for production and operation. In accordance with the requirements of the "Notice of the State Administration of Financial Supervision on Due Diligence Exemption for Inclusive Credit" (Jin Gui [2024] No. 11), detailed due diligence exemption scenarios tailored to assistance in small loans should be refined, and the due diligence work process should be clarified to improve due diligence efficiency. (2) Improve credit management processes. Banks should conduct credit rating and lending in compliance with laws and regulations based on the production and operation characteristics, periods, and repayment abilities of the assisted population, to reasonably determine loan amounts and terms. Encourage banks to fully utilize financial technology to develop credit models based on the production and operation data of the assisted population, ensuring user privacy and data security, to improve approval efficiency. (3) Manage loan renewals and extensions well. For those in need of additional financing, banks should assess and process renewals or extensions for eligible loan applicants in compliance with laws and regulations. Assistance in small loans can be renewed or extended once. For small loans to poverty-stricken populations disbursed during the transition period that are due after the transition period and meet the conditions for assistance in small loans but have not previously been renewed or extended, they can also be renewed or extended once in accordance with this notice. The renewal or extension period should follow the guidelines outlined in this notice. Fully repaid loans from the assisted population meeting loan conditions can apply for loans multiple times. III. Optimize Support Policy Coordination Mechanisms (1) Implement differentiated regulatory policies. Financial regulatory authorities should continue to improve the main responsible bank mechanism for assistance in small loans, guiding banks to improve the quality and effectiveness of credit supply. Small loans for assistance above the bank's own bad loan ratio by 3 percentage points will not be considered as factors for regulatory assessment and internal performance evaluation deduction. Assistance in small loans for the poverty-stricken population that operates in compliance with the law, continues operation, has good credit, and has no history of interest evasion or debt evasion should not have their loan risk classifications downgraded solely because of loan renewals. Guide banking institutions to implement and elaborate on the due diligence exemption policy for assistance in small loans. (2) Use monetary and credit policies well. The People's Bank of China should comprehensively employ monetary and credit policies to support banks in providing assistance in small loans. (3) Strengthen the leverage of fiscal funds. Financial departments should play their functional role well, timely allocate financial subsidy funds according to procedures, enhance subsidy fund disbursement efficiency, and engage in full-process control of subsidy fund allocation. (4) Enhance information sharing and use. The agricultural and rural departments should strengthen business guidance and financial policy propaganda for the assisted population engaged in production and operation. Financial regulatory departments and agricultural and rural departments should monitor the implementation of assistance in small loans regularly and share relevant data and information with financial departments. IV. Strengthen Risk Prevention and Control Mechanisms (1) Enhance the accuracy of loan issuance. Banks should conduct thorough pre-loan investigations and in-loan reviews, focusing on the compliance of production and operation activities for the assisted population, the authenticity of financing needs, and preventing non-listed groups from taking advantage of assistance. Banks should independently decide whether to issue loans for assistance in small loans, and should not be interfered with by any unit or individual. Loan applicants should apply as needed, and banks should approve loans according to standards. Local authorities should not impose loan balance, new loan, loan acquisition rate requirements on loan balances, new loans, loan acquisition rates, etc., administratively. (2) Regulate the use of credit funds. Banks should strengthen post-loan management, enhance the use of financial technology, effectively supervise the use of loan funds, conduct self-inspections effectively, rectify violations such as the "household loaned, enterprise used" promptly, and effectively prevent and control the risks of evasion and debt evasion. For loan applicants removed from the assisted population list, loans with terms not yet due should not be retroactively adjusted; for loans with terms due still requiring financing, these loans should be timely converted into loans for households when due. Financial regulatory authorities should focus on monitoring the allocation and use of funds for assistance in small loans in their daily regulatory work. (3) Carefully handle overdue loans. Banks should fulfill the main responsibility for credit risk prevention and control, strive for support from local party committees and governments, strengthen cooperation with grassroots organizations such as village committees, first secretaries stationed in villages, and work teams, and actively and prudently handle credit risk prevention, recovery, and disposal tasks in accordance with market-oriented and legal principles. For regions with high or rapidly increasing overdue rates, financial regulatory authorities should work with relevant departments to strengthen analysis and judgment, timely alert banks to risks, guide banks to actively and prudently resolve risks, and collectively solve problems. Banks should suspend the issuance of assistance in small loans in areas with exceptionally high overdue or bad loan rates. (4) Implement credit risk compensation. Encourage regions with conditions to enhance the risk compensation mechanism for assistance in small loans without increasing hidden local government debts, clarify the conditions and processes for risk compensation initiation, and provide risk compensation for assistance in small loans within the tolerable range of differentiated regulatory policies for bad loans, with specific compensation details formulated by each region based on actual conditions. V. Ensure Effective Implementation of Work (1) Strengthen organizational leadership. Financial regulatory departments at all levels, as well as the Ministry of Finance, the Ministry of Agriculture and Rural Affairs, and branches of the People's Bank of China should enhance their ideological understanding, strengthen political responsibility, increase work coordination, policy coordination, and information sharing efforts, and fully leverage the collective effort of the work. (2) Coordinate policies well. Small loans for poverty-stricken populations contracts signed during the transition period (before December 31, 2025) and before the issuance of this notice (including renewal or extension contracts) should maintain all policy aspects unchanged throughout the contract period. (3) Track policy execution effects. Local authorities should monitor and analyze data related to assistance in small loans, and timely evaluate the effectiveness of policies. (4) Strengthen publicity and guidance. Various forms of publicity for assistance in small loans policies should be carried out, ensuring that the assisted population with production and operation financing needs are fully aware of the policies. Strengthen financial knowledge dissemination in rural areas to enhance the assisted population's awareness of preventing financial fraud and illegal fundraising. Timely summarize the experience and practices of assistance in small loans and promote and disseminate them in an appropriate manner. China Banking and Insurance Regulatory Commission Ministry of Finance Ministry of Agriculture and Rural Affairs People's Bank of China February 24, 2026 This text is compiled from the official website of the "State Administration of Financial Supervision and Administration", edited by GMTEight: Wang Qiujia.